Agricultural biotechnology giant Monsanto Co. (MON: Quote) on Wednesday reported a 35 percent increase in profit for the third quarter, boosted by a strong seed selling season and better-than-expected sales across the company's chemistry portfolio. Looking ahead to fiscal 2012, Monsanto affirmed its recently increased earnings guidance.
The Seeds and Genomics segment, which consists of Monsanto's global seeds and related traits business, recorded an 18 percent increase in sales for the quarter to $3.13 billion. The segment's growth was driven by strong sales across Monsanto's U.S. corn and soybean portfolios.
In the U.S. market, continued sales momentum carried from the early spring throughout the planting season and an increase in planted acres of corn across the country helped deliver a record seed sales volume season for Monsanto.
The Agricultural Productivity segment generated $1.09 billion in sales, up 14 percent from the same period last year. The increase was due to higher-than-expected sales across Monsanto's chemistry portfolio, including its Roundup, lawn-and-garden and selective herbicides businesses. The segment consists of the crop protection products and lawn-and-garden herbicide products.
Hugh Grant, chairman, president and chief executive officer of Monsanto said, "We've achieved excellent business results this year, but more importantly we've continued to receive positive response to our products from farmers. As I look to 2013 and beyond, I am confident as our momentum is now validated with sustained business results and I believe the opportunity ahead for our customers, our business and our owners is significant."
Monsanto's net income for the third quarter rose to $937 million or $1.74 per share from $692 million or $1.28 per share in the prior-year period.
Ongoing earnings per share increased to $1.63 from $1.28 in the year-ago quarter. On average, 15 analysts polled by Thomson Reuters expected the company to report earnings of $1.60 per share. Analysts' estimates typically exclude special items.
Net sales for the quarter grew 17 percent to $4.22 billion from $3.61 billion in the year-ago period. Analysts had a consensus estimate of $4.00 billion.
The increase in net sales was driven by unit volume growth in Monsanto's seeds and traits business, complemented by better-than-expected sales across the company's chemistry portfolio.
Looking ahead to fiscal 2012, Monsanto affirmed its outlook for earnings per share in a range of $3.65 to $3.70 on an ongoing basis and $3.73 to $3.78 on an as-reported basis. Analysts expect the company to earn $3.70 per share for the year.
Further, Monsanto reaffirmed its previously announced free cash flow guidance for fiscal year 2012 in a range of $1.7 billion to $1.8 billion.
For fiscal 2013, Monsanto projects mid-teens ongoing earnings growth projected from the base of $3.65 to $3.70. Analysts expect earnings of $4.24 per share for the year.
MON closed Tuesday's trading at $77.87. In Wednesday's pre-market, the stock is adding $0.58 or 0.74 percent to $78.45.
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by RTT Staff Writer
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